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A Little Known Concept

What comprises the concept of "risk management" for public administration? Exactly what its name indicates: a discipline (or rather: a management perspective) that postulates that all organizations face, willingly or not, a set of risks that cannot be ignored. These represent threats of lesser or greater importance to both private and public organizations and consequently for their finances, staff, property, etc. However, logically, rationally, and professionally managing these risks reduces all types of losses and benefits the management of property and persons.

How to Proceed?

It is necessary, first and foremost, to consider the higher objectives of the public service; that is, the objectives that justify their existence and are not consequences of other principles. All other objectives will be, by definition, secondary.
Once these higher (ultimate) objectives are defined, it is necessary to consider the duties, tasks, and goods that are necessary to obtain these objectives. They are generally in various plans: financial, computer, real estate property, or human resources, for example.
It is also necessary to identify the dangers that weigh on these duties, tasks, property, and liabilities that can constitute risks.
The next step consists of determining the risks that can and should be completely eliminated. Then, the methods to achieve this and their eventual costs should be determined. It is important to have a prevention mechanism. Other dangers cannot warrant more than a reduction, which constitutes bringing them back to admissible proportions (whatever is allowed: "we support the calculated risk of...").

Prevention, Transfer, and Financing

Provided that the risk is considered threatening and cannot be completely eliminated, the issue lies in the "compensation" of this risk or, more exactly, in its financing. If the risk persists, with either greater or lesser importance, the public entity will have to ensure a financial contribution if the risk manifests itself, whether that contribution constitutes a reserve that is financed on its own account or whether it is transferred to a third party.
In the second case, a security mechanism that does not protect the organization (or the persons) against the risk in question, but does protect the property and persons in danger because of the risk, is necessary. In this way, if a fixed asset is destroyed in a fire, it is not available any more. However, if it is insured, we can benefit on a short term basis from the indemnities that allow for the financing of the clean-up and the reconstruction of the burnt asset.

The Professionalization of Risk Management in Administration

From here on in, the idea of professionalizing risk management is far from being absurd, namely because it is an attitude that gives judgment and intelligence to the management of public administration. It protects it against the harmful consequences of risks and optimizes the means to confront the risks that cannot be eliminated.
Recognizing the specifics of risk management in public administration, Broker'sLink developed a specific work methodology for risk and insurance management for the public sector, which is based on a vast knowledge of the rules of public contracting, the treatment and advising of risks to retain and transfer, the evaluation of property, the development of all the documents necessary to open of public competitions, the respective follow-up, the placement and management of insurance, claims management, the periodic development of management information, and the training of administrative departments.